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4/1/17

Tinka Resources (TK.v) was on trading halt all day yesterday Friday due to impending news that eventually didn't show up. The reason for the halt: Drill results. Expect them Monday morning pre-open. That's a plain fact, not an April Fool*, IKN gives you straight dope as always.

As for the contents of the drill results NR, you're just going to have to do the same as me and wait until Monday.

*I waited until after midday April 1st to post this, all normal rules apply, this is not a joke.

First Place: "Cobalt juniors are for suckers". By far the most popular post of the week, as the combo of 1) latest pump fashion metal 2) promoters failing to disclose the real truth about the players n the cobalt space and 3) inquiring minds wanting to know what the catch is and nobody tells them (except here) proves a winning trifecta. Mine stock pumpers don't like the truth.

Tonight IKN takes the step of unveiling one of the junior mining world's most closely guarded secrets of 2017. We can exclusively reveal to you that the person behind The Angry Geologist is none other than James 'Jim' Gowans, long-time mining and exploration stalwart and the current head of Arizona Mining (AZ.to). It's due to his current position that Gowans did not want to be revealed as TAG, but the cat is now out of the bag.

You heard it here first, ladies and gentlemen.

UPDATE midday Saturday: Please take into account the date of this post:

...we'll take a second look at Rye Patch Gold (RPM.v) now that it finally looks like it's getting its trasero into gear. Other things too, of course. And that's all the posting for this Friday. For secret reasons. Friday OT later, but not much happening on this blog so no need to come back.

News from the Rapier Gold (RYR.v) AGM today, at which the board was opposed by a proxy slate presented by Delbrook, is that the Delbrook slate has won and the old board has been kicked out. The leavers include that criminal in white collar and awful shoes, Daryl Hodges. It's also sweet to note that despite the old board attempting a whole box of legal tricks in a desperate attempt to hang on to their jobs, their legal counsel headed up by Daryl Hodges' best pally pal Chuck Higgins of Fasken has failed miserably to protect the scumballs and lost.

Bye Bye Daryl, you pathetic piece of shit. What goes around comes around and the sooner Canada is rid of criminal parasites like you, the better. Looks like all you have left now is your side job of selling marijuana on the streets of Toronto.

And generally speaking, any sudden move in anything at the end of a quarter is easy to discard, remember there are a lot of fund managers who make most of their money on performance bonuses. Dress those windows, guys.

Back in late December IKN ran the post"How scamsters think, Fairmont Resources (FMR.v) Edition" which shone a little light on the nefarious way Fairmont Resources (FMR.v) was going about its business. Since then your author collected more information about this company and the time has come to tell you all, happy loving people of the Canadian mining community, because this isn't just A.N. Other sketchy junior.

Fairmont Resources is a fraud. A clear-cut criminal fraud and the people running the company, namely Michael Dehn (President and CEO) Michael Thompson (director) Ernest Cleave (director) and Neil Pettigrew (director), are fraudsters. FMR fabricated false financial documents in order to make out they have financing for their project, because they were about to be taken away by judicial order. And now those fraudulent documents have come to light.

Here's a little ditty that was for subscribers last Sunday. You'll be unshocked and unsurprised to learn that one of the financial whores being paid to pump this to you in the enar future is Tommy Humphreys of CEO.ca.

My thanks
to A. Reader for the nudge on this little note, which can be subtitled “A
lesson in what poor management, excessive financial debt and
over-promise/under-deliver can do for your share price”.

Even before
the end of 2012 it was clear that Gran Colombia Gold (GCM.to), the Serafino
Iacono trainwreck of a mining company, had plenty of problems because its share
price had already tumbled by around 80% since the start of 2011. But instead of
going for the big numbers its shares traded for the in 2009 to 2011 period, I’m
going to go for the modest 35c share price it typically traded during most of
and at the end of 2012.

Then in
mid-2013 GCM announced (15) a 25-to-1 share consolidation. In other words, if
you owned 25 shares of GCM, that was suddenly converted into one share.

Life went
on though the next three and a half years until this week, when the company
announced (16) it had received shareholder approval to run another share
consolidation, this time 15-to-1. Yes, those shares you owned before that were
shrunk 25 times have just been shrunk another 15 times or in other words, if
you owned 375 shares of GCM at the beginning of 2013, in just a few days’ time
that will be down to just one share, no buying or selling.

As GCM is
currently trading at-or-around 10c, when the 15:1 rollback is official we can
reasonably expect each single share to be worth $1.50. So let’s do a little
theoretical calculation by imagining this reasonable situation:

At the end of 2013, you bought
3,750 shares of GCM at 35c apiece.

Due to the double effect of
the two rollbacks since then, those 3,750 shares have become just 10
shares.

At the time, you paid
approximately $1,312.50 for your share.

They are now worth $15.

And if you
think that’s bad, consider how much money Frank Holmes lost for his Global fund
when he waded bigtime into GCM stock in 2009 and 2010 (and also told everyone
else to do the same on many many occasions), paying a typical $2.50 to $3 a
share at the time.

Finally, do
of course expect a big round of promo pumping on the back of the consolidation
when it’s finalized so do yourself a big favour; make a note of the people
telling you that GCM.to is a great opportunity, having that little list to hand
may save you a lot of money in the future.

Add the serial failure to deliver on promised profitability to the warning on production fro 1q17 and the undisclosed legal problems that DNG covered up. This is Louis Lobito Little Wolf's idea of a Top Pick, the naive fool.

3/29/17

Far better than reading the IKN take on AZ.to earlier today, go over to Angry Geologist and read as TAG's succinct and pithy take on "One-Of-The-World's-Largest-Manganese-Zinc-Deposits", with particular emphasis on the numbers out of AZ's 'Epitaph Zone' this morning.

A motley crew of deluded fools even more annoying than IKN, it's been a pleasure to hear the roaring silence from the silverbugs, that group of diehards who actually think silver mining companies are smart investments. But why should these knucklescrapers be so quiet this year?

Fortuna Silver (FVI.to) (FSM) down 19% in 2017 year to date.

Tahoe Resources (THO.to) (TAHO) down 19% in 2017 year to date.

Endeavour Silver (EDR.to) (EXK) down 17% in 2017 year to date.

First Majestic Silver (FR.to) (AG) down 1% in 2017 year to date

Great Panther Silver (GPR.to) (GPL) down 5% in 2017 year to date.

IMPACT Silver (IPT.v) down 6% in 2017 year to date.

Silver One Resources (SVE.v) down 38% in 2017 year to date.

Ah yeah, that'd be it.

Gold stocks are nicely up YTD, by the way. So much so that the XAU "gold and silver miners" index can shrug off the negative influence of the silver dogs and be in positive territory so far.

Here at IKN Nerve Centre, your humble scribe notes with interestthe Arizona Mining (AZ.to) news release of this morning. It does of course shout loudest about the things the company wants you to read, such as the improved recovery percentages for zinc and lead and silver at its Taylor project. But as always, it's what they have to slip in quietly that's most important and interesting. Here's that bit:

"The projected manganese (“Mn”) content of the final zinc concentrate is
1.32%, in line with the preliminary metallurgical test work."

And that is most interesting, because in it's December 14th 2016 NR, AZ.to told us this (IKN underlines and bold-types):

As previously disclosed, Arizona Mining has done initial bench-scale
metallurgical work on the various types of ore found at the Taylor
deposit which does not yet reflect cleaner stages, regrinds or any
optimization, which may reduce the manganese levels. The same initial
results show very low iron and cadmium contents and negligible mercury
and arsenic, which are other common undesirable elements.

Initial work indicates a manganese content of approximately 0.1% in
the lead concentrate and approximately 1.3% in the zinc concentrate. As
previously noted, the penalties for a zinc concentrate containing 1.3%
manganese are estimated to be $12 per dry metric tonne versus the zinc
concentrate value of over $1,100 per dry metric tonne at a $1.00 per
pound zinc price. This equates to approximately 1% of the estimated
concentrate value and is therefore immaterial.

Indeed, in its rebuttal NR to the light shone upon the manganese problem at Taylor by Global Mining Observer back in December, AZ.to tried to get us to believe that the initial stage met work was one thing but once the bigger science was rolled out they'd be able to get the Mn content down. Today we get the reality: It's not 1.3% any longer, it's 1.32%. Cue 70's sitcom style canned laughter.

Not only that, but Oskar Lewnowski of Orion Mine Finance doesn't sound like a very smart businessman to me. When wheeled in to give support to AZ.to he said this:

“We would be prepared to purchase as much of the zinc
concentrates, at market, without penalty, as we could.”

In other words, he's be prepared to buy this Mn-heavy conc with no penalty, when he could easily pay less if he wanted. Yup, that's capitalism for you. Or maybe, just maybe, Lewnowski was asked to BS the market by Richard Warke and say anything that sounded good in a desperate attempt to cover up the project's fatal flaw before it totally tanked the share price. Hell...I dunno. But what I do know for sure, a stone-cold fact, is that Richard Warke decided to hire a company of spies to find out all about an alleged short-selling conspiracy against his company once the Mn scandal had been revealed and that spy company were stupid enough to start snooping on me, your humble scribe at IKN, as part of their investigation. Unsurprisingly Warke's sneaky attempt at espionage has uncovered nothing at all, because there never was a short conspiracy against AZ.to, it was all in his paranoid brain. But I'm glad you know where my kids go to school now, Richard, certainly hope that information helps you in your future business endeavours.

Anyway, we await the PEA from AZ.to, which they promised for end 1q17. They have two days to deliver, so presumably that's coming out very very soon.

For most of the the third and fourth quarters of 2016 Graña y Montero, trading on the NYSE as GRAM, was a U$8 stock. Then came news of its involvement in the Odebrecht corruption and bribery scandal and the company went into free-fall, a drop we watched carefully at The IKN Weekly for the political angles in Peru.

But to last Sunday and the piece you see below the chart here, which wasn't an outright reco on the stock but was a rare non-mining long idea for subscribers. Since then...

...the stock's up 30% in two and a half days. Just sayin'. Here's the piece, as it appeared in IKN410 on Sunday evening.

Graña y Montero (GRAM): A heads up

It’s not
really the normal remit of The IKN Weekly so it’s not going to be a long note,
but I think it’s worth a few lines by way of a heads-up and perhaps a starting
point for your own DD, so here goes.

As noted on
several occasions in the last few weeks on these pages, particularly in the
‘Regional Politics’ sections, the big Peruvian construction and civil works
company Graña y Montero (GRAM) has bit hit very hard by its connections to the
Lava Jato/Odebrecht corruption scandal that’s been making waves all over South
America. Just one look at its 12 month share price (it trades as GRAM on the
NYSE) is enough to see the effect of being dragged into the corruption mess and
being actively connected with the bribes paid by Odebrecht to high ranking
individuals in Peru, up to and including ex-President Alejandro Toledo.

However,
there’s now reason to believe GyM is going to survive this mess and as such, it
may be a decent “blood on the streets” buy for consideration. The combination
of factors:

1)The
El Niño weather crisis currently hitting Peru hard will need clean-up and
plenty of reconstruction later. There is no better placed company to do that
work than GyM.

2)The
corruption scandal is beginning to be yesterday’s news in Peru and the
sensation that GyM isn’t going to collapse (the country’s own private “too big
to fail”) is growing. The 10% rise in the stock on Friday bears testimony to
that.

3)The
latest word, being reported in Peru this weekend (17), is that as well as the
recent change at the very top of the company and the resignation of the three
main company leaders, we’re about to get a complete change at the board of
director level with new (and we assume uncontaminated) blood coming in to lead
the company out of the hole it’s created for itself.

Up until
this scandal hit, GyM was one of the most highly regarded companies of any type
in Peru. With a direct employment roster of up to 40,000 people, as well as
untold numbers of indirect jobs depending on it, it’s one of the biggest
employers in the country too. The way in which the tide is turning, plus the
“fortunate” arrival of the most severe and damaging storm period for the last
two decades in Peru, may make the stock an interesting trade. You need to do
your own DD on this one though and check the company numbers carefully,
consider this a place to start, not a reco to buy.

We shall not cease from exploration
And the end of all our exploring
Will be to arrive where we started
And know the place for the first time. Through
the unknown, unremembered gate
When the last of earth left to discover
Is that which was the beginning;
At the source of the longest river
The voice of the hidden waterfall
And the children in the apple-tree

Little Gidding, T. S. Eliot

I no longer recognize England*, it's as unknown and mysterious a place to me as Mongolia, South Korea, Albania or Sudan.

3/28/17

Here's one of the 'Regional Politics' pieces from IKN410, out last Sunday evening. A sample of what goes on when I'm not goofing off on the blog and doing the real stuff.

Argentina: Lipsticking the pig

Last week
in London, Argentina’s Finance Minister Nicolás Dujovne appeared at a
conference organized by the Argentina/UK chamber of commerce and the Argentina
Embassy called “Plan Minero 2017”, at which those assembled extolled the
virtues of the country’s mining sector and the opportunities it affords today (8).

“I urge you to find the motivation to invest
in Argentina. You will be welcomed”, said Dujovne to the representatives from
the world level mining companies at his presentation and he backed up this wish
with his ten main points on what has improved in recent times. Here they are:

Macri has “normalized” the Argentine economy

There is now one normal, free floating exchange rate

The bond holdout court case is now resolved, which has
allowed Argentina access to the world debt market again.

Its INDEC stats office now produces reliable data.

The tax haven forgiveness program which has seen
dollar savings held in quasi-illegal offshore accounts come back into the
country and bolster reserves.

The process of “disinflation”, which according to
Dujovne has brought inflation back down to 18% annual.

Economic recovery, which according to Dujovne has seen
Argentina move out of recession in 4q16.

Job creation which, again according to Dujovne, has
seen jobs created at a rate of 25,000 per month recently.

The improvement in public sector accounting (a cute
way of saying “less corruption”).

Lower overall taxes, estimated by Dujovne to be 1.5%
less than in 2015.

He also
told them that the Macri government’s plan was to see Argentina GDP grow in the
long-term at between 3% or 4% per annum, a rate that could be sustained over
many years.

Now some of
those points are valid, such as the improvements made to the exchange rate
mechanism and the dropping of the 5% export tax for mining products. Others are
rather cherry-picked, for example the claim that inflation is down to 18%
annualized when that’s just one study from a range that put 2017 inflation
forecasts at between 18% and 22% (and there’s a lot of evidence to say it’s at
the upper end at the moment, including the latest inflation measurements just
out). Others still are rose-tinted specs stuff, such as claiming unemployment
is dropping (highly massaged figures there, the truth is that in the 2016
recession plenty of jobs were lost or became lower-paid) or there is less
corruption in Argentina today, a bit like saying a standard nuclear bomb is
less dangerous than an H-bomb. And in ironic timing, his claim that the INDEC
stats office came on the very same day a court of law ruled that the INDEC data
during the CFK government was totally reliable (in a case brought against the
country by index-linked bonds holders who claimed they were due more money
because INDEC rigged inflation data). What’s more, the new INDEC is now at the
centre of a small scandal when it was discovered the people collecting price
data weren’t bothering to go to the full range of shops and supermarkets and
just using numbers they saw in shop windows next to their subway stations on
the way to the office. So much for the new capitalist work ethic.

But what
really amused your author was the total lack of mention of the “Federal Mining
Agreement”, the grand plan of the Macri government to bring a level playing
field to the whole of the country and by-pass the provincial problems that
companies have had forever in the country. That’s because the whole plan,
pushed hard all through 2016, has been quietly dropped by the Macri government
because it cannot get the “anti-mining” provinces on board. The whole plan (as
predicted on these pages) was a total waste of time/money, the ineffectiveness
of the country’s Mining Ministry is writ large against this failure and it
points once again to the most basic of truths about mining there; whatever national-level
advantages Argentina thinks it has, any mining company worth its salt knows
that without a welcome and agreements at provincial level you cannot do
mining business in the country, period. In real terms, that means Navidad (Pan
American), Agua Rica (Yamana), Suyai (Yamana), San Jorge (ex-Coro, now those
Russian guys) and a whole host of other projects located in anti-mining areas
will never happen.

And all
this is aside the problems faced by an increasingly unpopular Macri government
coming up against the mid-term elections (starts August, big votes in October),
because all this good will and future projection of a rosy future would all be
for naught if Macri’s party is beaten at the polls later this year, we would be
in immediate dead-duck presidency world. In short, IF Macri does well at the
polls in October and IF the country shows real signals of macro-economic
improvement, you may see big mining companies start to commit to Argentina.
Until then all these conference talks and optimistic presentations are an
exercise in lipsticking a pig. Argentina is still a basket case country like no
other, I care not if you prefer the policies of the current President to the
previous one.

PS: The worst thing about this deal is that on the back of the XRC end of this GG move, we now have to suffer the noisy idiots at the pump end of this sordid sector giving us another round of buy talk on the worst companies and projects out there, all those optionality things that will never ever work but are simply used as currency transference vehicles (from the pockets of dumbasses to their, via share transactions). International Tower Hill (ITH.to), Chesapeake Gold (CGK.v), Vista Gold (VGZ), NadaGold (NG), TwatMining (GOLD.v) and, of course, that godawful Scamsberry/Katusa pump up at Pebble.

3/27/17

Your humble scribe notes with interest the way the sell side community is going full-court press on cobalt juniors, urging you "to consider" a whole bunch of junior miners with cobalt deposits that will provide a hungry world with the Co it needs for a new generation of batteries. Because science. Unsurprisingly, one of the main sources of this pumpage are the minions that scurry around under Arthur Richards Rule IV (you might know him as self-made man Rick) over at Sprott and the chief mouthpiece at the moment is one Sam Broom, recently imported from Oz to tell us (and we quote), "Why Cobalt (Not Lithium) Could Be The Battery Boom's Big Commodity Winner" as well as his most recent pump piece, "The Cobalt Thesis" (oh...it's a thesis...so academic).

It's all bullshit. Two reasons:

1) Anyone who has investigated the sector carefully (e.g your humble scribe a few years back, the last time this silly sub-sector was pumped to the mouthbreather end of the market) will know that the producers have no sway at all over the supply side of the Co equation. That's something tightly controlled by the refiners and, the China black box aside, that means Freeport and Glencore. The big players have a good thing going with cobalt and they're not going to let anything as radical as free market economics ruin that for them.

2) There are a few dedicated cobalt mines around the world, but the lion's share of the stuff is produced as a by-product, not a product. In that way it's similar to silver, a metal with a price these days driven by the ultra-low costs of being a by-product (we've discussed this before, in August 2016 to be exact). But it's even worse for Co because it's a purely industrial metal, it doesn't even have the rabid guns'n'freedom idiots to back it up. The upshot is that 99.9% of these "cobalt opportunities" that Spott and others will "suggest" to you don't have a snowball's in hell of prospering because they'll never be able to compete on price when the big boys slam the door.

So just forget about this latest pump, it's silly, but Sam Broom does at least have one sensible thing to say in his pump pieces to the unknowing. He writes:

"It’s thus extremely important to speak with a qualified investment professional before jumping into the sector."

Very true, but if you do and that qualified investment professional does not immediately shout "RUN AWAY! RUN AWAY!" when you ask him for a good Co trade, he's not an investment professional. He's a bullshit speculator professional. Thus endeth the IKN cobalt rant.

Toachi Mining (TIM.v) is already 24.5% down since that paragon of marketing prowess appeared at the world's biggest mining bunfest and the trend just ain't its friend. Company CEOs, don't think for a second that it's all about your precious geologists because your IR department can screw you just as quick as the things you think are important.

The inhabitants of the municipality of Cajamarca, on the West side of the department of Tolima, voted this Sunday to say No to gold mining in its territories. In this way they have opposed the La Colosa mining project owned by the multinational AngloGold Ashanti.

The bulletin number 10 of the national electoral body stated that the No vote had won with 97.92% of votes, i.e. 6,165 votes. For Yes there were only 76 votes. There were 41 blank votes and 14 annulled votes.

Since 8am this morning the 18 voting locations were open across the municipality, with a total potential number of voters of 16,000. The result of the vote now obliges the municipal council to adopt the necessary measures to prohibit mining in its territory.

Paulinho scored three of the four as Brazil whupped Uruguay 4-1 in Uruguay last week but the outstanding goal was the other one, scored by Neymar. Take a look:

It's when they make it look easy that you stop and stare. A total peach.Youtube here and by the way, the good news for world footy and the Russia 2018 World Cup Finals: Brazil are back, the Scolari years are just a bad memory and they're now looking very good indeed.

On perusing the back office stats a few minutes ago, I noticed that one Stan Sudol, the person behind the website Republic of Mining (no, there's no away I'm linking you through) has recently signed on a subscriber for the IKN free daily mailer. Therefore here follows a message that's been lovingly tailored for Stan and Stan alone.

Dear Stan

Fuck the fuck right off Stan Sudol, you and your worthless website that just scrapes content off other people and gathers all the clicks for itself. Don't you even think of ripping off IKN like you do other sites in your desperate attempt to fill your parasitical den of plagiarism with content. The day that Reuters, Bloomberg, Globe & Mail, Mining Weekly and every other channel you cheat out of traffic slaps a cease and desist order on your sorry, freeloading ass will be a good day for the internet. Fuck the fuck right off and never come back to IKN.

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